Shares of One97 Communications, the parent company of payment solutions provider Paytm, fell 10% on the National Stock Exchange and hit an intraday low of Rs 864.40. Shares of Paytm fell 9.97% on the BSE and hit an intraday low of Rs 864.20. This sharp fall in Paytm shares came after the Finance Ministry dismissed speculations of the implementation of Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions.
The Finance Ministry said in a post on social media on Wednesday, “Speculations and claims of imposition of MDR on UPI transactions are completely false, baseless and misleading. Such baseless and sensational speculations create unnecessary uncertainty, fear and doubt among our citizens. The government is fully committed to promote digital payments through UPI.”
MDR is the rate charged to the merchant for processing payments through debit and credit cards.
Media reports have suggested that the government may impose MDR on UPI transactions.
Paytm shares witnessed higher than usual trading volumes as 83.29 lakh shares were traded within 30 minutes of market opening on NSE as against an average of 41.67 lakh shares. 3.71 lakh shares were traded on BSE as against an average of 2.77 lakh shares traded daily in the last two weeks.
To promote digital transactions, the government reduced the Merchant Discount Rate (MDR) to zero for RuPay debit cards and BHIM-UPI payments from January 2020.
To provide further support to stakeholders in the payment ecosystem, the government launched the “Incentive Scheme for Promotion of RuPay Debit Card and Low Value BHIM-UPI Transactions (P2M)”. The scheme specifically covers UPI person-to-merchant (P2M) transactions of up to ₹2,000 done by small merchants.
In May alone, UPI processed 18.68 billion transactions worth a total of ₹25.14 lakh crore, up from ₹23.95 lakh crore in April. As of 9:46 am, Paytm shares were trading 7.52% lower at ₹888, underperforming the BSE500 index, which was down 0.19%.
